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Will the Revenue go easy on SMEs in taxing times?

The FSB is urging the Revenue to go easy on SMEs who miss tomorrow's tax return deadline...

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Published: 30 Jan 2009

Last Updated: 31 Aug 2010

When you’ve got your hands full fighting a crippling economic downturn, the last thing you want to be doing is worrying about taxes. That’s why the Federation of Small Businesses is urging HM Revenue and Customs to give small businesses a break if they don’t get their tax return in before tomorrow’s deadline – which, just to complicate matters further, falls on a Saturday. The Revenue should be more understanding to businesses’ current woes, it argues – rather than kicking them while they’re down with a £100 fine…

‘In these tough times there are many reasons why they will need up until the deadline day to file their return,’ suggests the FSB’s John Wright sagely. But what would constitute a decent excuse, exactly? Well, the Revenue will theoretically let you get away with fire, flood (not sure about other biblical plagues), theft, computer breakdown, serious illness or bereavement. However, the FSB reckons it should go further: it admits that ‘dog chewing computer wires’ falls into the ‘unacceptable’ category (a genuine excuse, apparently – we’ll have to remember that the next time we submit late copy to the editor). But it argues reckons that something like sickness in the vital week (which has previously been rejected as an excuse) should be considered perfectly valid.

Unfortunately, the omens are not particularly good. Last year, thousands of people predictably left the tedious task until the last possible minute, and tried to complete their tax return online on deadline day – only for the HMRC website to fall over due to the weight of traffic. Eventually, the red-faced Revenue had no option but to extend the deadline, but not before lots of small business owners spent most of the day frantically tearing their hair out. This year, it’s already refused to move the deadline back by two days (to stop it falling in the middle of a weekend).

We’d love to think that the taxman will read this and opt for a soft-touch approach, on the perfectly reasonable grounds that Britain’s hard-pressed small businesses really do need all the help they can get. On the other hand, as the Institute of Fiscal Studies pointed out this week, Britain needs to raise an extra £20bn a year to restore the public finances after the Government’s recent spending spree (and even then it’ll take until 2030 until we’re straight).

In other words, the Treasury needs every penny it can get at the moment – even £100 fines. Our advice would be to make sure you get that tax return sorted before you leave today...